2 April 2020 Capital Goods In a communication to the stock exchanges, Bharat Electronics (BEL) has mentioned that it ended FY20 with record turnover of over INR125b (+6% YoY). The BEL management has further stated that execution could have been higher, if not for the COVID-19 outbreak and the economic slowdown. Adjusted for the VVPAT/EVM revenue of INR26b last year, FY20 revenue growth stands at 35% YoY. The total order inflows for FY20 stood at INR130b. FY20 order book stood at INR518b (flat YoY). This translates into Ob/Rev ratio of 4x, providing strong revenue visibility over the next 3 years. BEL has demonstrated strong execution capability over the years and is well placed in the current troublesome time of COVID-19. While we remain confident of BELs execution capability and believe it is the best play in the Indian defense sector, we believe the companys re-rating depends on its working capital management.